Canada's aerospace and defence sectors innovate, grow and create jobs

Lockheed Martin invests $10 million in Montréal-based supplier of mission-critical equipment

MONTRÉAL, April 3, 2017 /CNW/ - Canada's aerospace and defence sectors play an important role in Canada's economy. Recent investments in the Canadian Forces and the Canadian Coast Guard have resulted in economic spinoff activity that includes the creation of new jobs and companies across the country.

This spinoff activity is the direct result of the Industrial and Technological Benefits (ITB) Policy, which requires successful suppliers to invest in Canada an amount equal to the defence contract that they have won.

That was the message delivered by the Honourable Navdeep Bains, Minister of Innovation, Science and Economic Development. Minister Bains delivered a keynote address to launch a conference hosted by Aéro Montréal, a think tank representing Quebec's world-class aerospace sector.

Minister Bains also announced that Montréal-based Mannarino Systems and Software, an engineering firm that supplies mission-critical equipment to the aerospace and defence sectors, will receive a $10-million investment from Lockheed Martin, a supplier of equipment to the Canadian Forces. The investment by Lockheed is part of the company's ITB obligations for the in-service support of the C-130J Super Hercules, a transport aircraft.

Among other things, the investment will support Mannarino's efforts to develop proprietary software systems for aircraft.

Minister Bains pointed to the investment as an example of how the ITB Policy enables Canadian businesses to grow, innovate and export. Such investments in the development of new products and next-generation technologies equip Canadians working in the sector with the skills they need for the well-paying jobs of the future.

Quote

"The Industrial and Technological Benefits Policy has real and tangible benefits. By applying this policy, the federal government is able to create high-skilled, well-paying jobs for Canadians working in the sector. Investments made under the policy, such as those made by Lockheed Martin, support research and technological breakthroughs. And they create the next generation of businesses, such as Mannarino, that have the potential to participate in the global supply chain for the aerospace and defence sectors. That's how defence procurement drives innovation that leads to better jobs and better business opportunities for Canada."
– The Honourable Navdeep Bains, Minister of Innovation, Science and Economic Development

Quick facts

  • The Canadian aerospace and defence sector supports more than 240,000 jobs and contributes $31 billion annually to Canada's gross domestic product.
  • The Canadian defence industry includes over 650 firms, supports the employment of more than 63,000 full-time workers and contributes $9.4 billion in revenue. The sector employs highly skilled workers in high-quality jobs.
  • Since 1986, Canada's ITB Policy (and previously the Industrial and Regional Benefits Policy) have contributed almost $40 billion to Canada's gross domestic product. These investments have led to good jobs for Canadians across the country.
  • To date, over 90 percent of ITB obligations have been completed or have activities in progress.
  • The ITB Policy requires winning contractors to invest in Canada at an amount equal to the contract they have won. The policy's Value Proposition ensures that defence contracts are awarded based on each bidder's economic commitment to Canada, alongside price and technical merit.
  • Recent contract awards, such as the fixed-wing search and rescue project, have generated high-value investments in Canada and work for the Canadian aerospace and defence sectors.
  • Future opportunities include the proposed purchase of an interim fleet of Super Hornets and the future competition for fighter jets, which will mean more opportunities for Canadian aerospace and defence firms to position themselves within the global value chains of major multinational aerospace companies.

Related products

  • Backgrounder  

Associated links

Follow Minister Bains on Twitter: @MinisterISED

Backgrounder

The Industrial and Technological Benefits Policy

Originally known as the Industrial and Regional Benefits (IRB) Policy, the Industrial and Technological Benefits (ITB) Policy was launched in 2014. The ITB Policy requires companies that are awarded defence procurement contracts to undertake business activity in Canada equal to the value of the contract. The Policy applies to all eligible defence procurements with a value over $100 million.

The ITB Policy includes a Value Proposition. This is the economic commitment that bidders make to Canada up front at bid time, which is a scored and weighted factor in winner selection and becomes a contractual commitment for the winning bidder. Value Proposition requirements are tailored to each procurement to allow the government to steer investments and take advantage of the unique economic opportunities offered by each project.

The portfolio of IRB and ITB obligations includes 137 contracts valued at over $40 billion:

  • Over $37 billion in activity has been invested or is currently under way.
  • There is nearly $3.8 billion in future work opportunities.

Between 2011 and 2015, the ITB Policy resulted in $1.75 billion being invested in 375 small and medium-sized enterprises (SME). These investments helped embed these SMEs into supply chains with long-term growth opportunities.

During the same time frame, the policy supported research and development at 45 Canadian post-secondary and research institutions at a value of $82 million. Innovation investments create commercialization opportunities across sectors. The policy investments helped to maintain or create 39,000 jobs annually across Canada.

Contractors are required to report on fulfilling their obligations, and this progress is published at www.ic.gc.ca/ITB. The departmental report shows the progress toward meeting obligations in a manner that respects commercial confidentiality. The report ensures that Canadians are more informed on the impact of the policy. This also allows Canadian-based companies to more easily identify and engage prime contractors who are still exploring partnerships and potential investments in Canada to fulfil their obligations.

 

SOURCE Innovation, Science and Economic Development Canada

For further information: Contacts: Karl W. Sasseville, Press Secretary, Office of the Minister of Innovation, Science and Economic Development, 343-291-2500; Media Relations, Innovation, Science and Economic Development Canada, 343-291-1777, ic.mediarelations-mediasrelations.ic@canada.ca

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